The pig breeding system is adjusted and optimized, and the breeding cost is expected to be improved in the future. The company's individual field is ahead of schedule and accelerated in the first half of the year, resulting in a higher complete cost. Excluding the index of abnormal field, the complete cost is about 18.3 yuan / kg. The company's pig breeding cost is expected to be further improved in the future, which is mainly reflected in: 1) in terms of breeding, the company has introduced leading breeding equipment and methods at home and abroad, such as ALOKA tester, B-ultrasonic backfat tester, BLUP genetic performance evaluation method, KFNets management system, etc., so as to improve the efficiency of breeding and breeding, select high-yielding breeding pig breeds that can meet the quality needs of Hong Kong in breeding pig improvement, and reduce piglet cost sharing. 2) optimize the feed formula, improve the feed conversion rate and reduce the feed cost; 3) further dilute the fixed cost through full-load production to form economies of scale; 4) strengthen disease prevention and control and feeding management, by improving the biosafety system, fine management of the whole process of pig feeding to improve production efficiency. Driven by a series of comprehensive measures to reduce costs and increase efficiency, the company's full cost this year is expected to drop to less than 17 yuan / kg.
The capacity layout supports the continuous expansion of the scale of the column. 23H1 sold a total of 366400 live pigs, an increase of 50.89% over the same period last year. In terms of production capacity, as of July 23, the company could reproduce more than 40,000 sows, have a land reserve capacity of more than 2 million, and built a production capacity of about 1.5 million. In the future, with the completion of Dongyuan Dongrui modern agricultural complex project and Huizhou Dongrui multi-storey building pig breeding project, it is expected to increase production capacity by 500000. The company's capacity expansion has led to the continuous growth of pigs, and the number of pigs in 23 years is expected to reach about 800000, which is expected to grow faster than the 520000 in 22 years.
Adjacent to Guangdong-Hong Kong-Macau Greater Bay Area, pig sales price advantage is obvious. As a leading supplier of live pigs from the mainland to Hong Kong, the company has a complete integrated self-breeding industry chain, including pig breeding, pig breeding, feeding management, feed formula and so on. The company is adjacent to Guangdong-Hong Kong-Macau Greater Bay Area and has the advantages of low loss and short journey in the transportation and distribution of live pigs supplied to Hong Kong. In the first half of 23, the average selling price of the company's commercial pigs was 16.60 yuan / kg. According to wind, the average price of live pigs in 22 provinces and cities in China was 14.85 yuan / kg in the same period, reflecting the price advantage of the company's pigs supplied to Hong Kong. In 22 years, the company exported and supplied 250800 live pigs from Hong Kong and Macao, of which 221900 were self-exported, accounting for about 23% of the mainland's live pigs supplied to Hong Kong. With the continuous improvement of the company's quota, it is expected to obtain more quotas in Hong Kong in the future. the proportion of mainland supply to Hong Kong is expected to rise to more than 30 per cent.
Investment suggestion: the company's net profit in 2023, 2024 and 2025 is expected to be 50 million yuan, 310 million yuan and 550 million yuan respectively, an increase of 15%, 52% and 79% respectively over the same period last year. The current stock price corresponds to 109,18 and 10 times of PE respectively. Cover for the first time and give a buy rating.
Risk hint: livestock and poultry price fluctuation risk, epidemic disease sudden risk.